Closure of Copal Casting
Alumasc, the high specification building and engineering products company, announces the closure of Copal, its loss-making gravity casting business, based in Handsworth, West Midlands.Following expressions of interest, negotiations to sell Copal have been taking place for several months, but have failed to secure a buyer. The business, which has incurred mounting losses since the demise of Rover in April, will commence closure on 18 November 2005.
Alumasc’s accounts for the year to 30 June 2005 included Copal’s losses in the year and a write-down of assets in anticipation of a sale of the business. Trading losses prior to closure in the current year and redundancy costs, estimated at approximately £1.5 million in aggregate, will be accounted for as discontinued activities in the half year accounts to 31 December 2005.
Withdrawal from Copal, as from Bissell earlier in 2005, is consistent with the Group’s strategy to focus its development in those core business areas of premium building and engineering products where know-how and service are at a premium.
Alumasc’s ongoing engineering activities are in the process of replacing business at Rover and Powertrain, the loss of which was reported to have cost the Group £1 million in the prior year. While the introduction of new projects and customers outside the automotive industry is, in general, proceeding satisfactorily, it appears unlikely to compensate fully in the short term for the work lost, with the result that the Board now anticipates lower profits from its ongoing engineering business in the first half of the current year (to 31 December 2005) than in the equivalent period of the prior year, with a further increase in the Group’s second half bias, highlighted in last month’s AGM Statement. Meanwhile, the Group’s building products activities, which contributed two-thirds to last year’s profits, have continued to advance in the early months of the current year.
The Alumasc Group plc 01536-383 844
John McCall (Chairman)
Paul Hooper (Chief Executive)
Bankside Consultants Limited
Charles Ponsonby 020-7367 8851